The wine industry grew over the last year, but growers are bracing for lower profits this year, with supermarkets pushing down wine prices.

Wine exports increased 24 percent to $992 million with the number of wineries lifting 58 to 643. Domestic sales of New Zealand wine grew 29 percent to 60 million litres. Wine imports fell 18.5 percent to 33.3 million. Export growth was driven by strong demand from Australia, the UK and America.

However, Stuart Smith, chairman of New Zealand Winegrowers, says the industry faces lower profits this year because of over-supply. He says wine had been selling itself because there was such a shortage of supply, but that is changing. Mr Smith says retailers buying wine in bulk and often bottling it under opportunistic retailer-owned brands has pushed the price down.

Mr Smith says the industry has to get its house in order and should only produce the amount of wine it can sell under its own label and leave the rest of the grapes on the vines. He believes effective management of supply is fundamental to the future success of the wine industry.